State Pilot to Streamline Medicare-Medicaid Patient Care

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Medical Economics Feature — May 2014

Tex Med. 2014;110(5):33-39.

By Amy Lynn Sorrel
Associate Editor 

When San Antonio pulmonologist John Holcomb, MD, treats patients enrolled in both Medicare and Medicaid, he knows he's dealing with a particularly fragile population that has little to no income and is elderly or has a disability. Neither these so-called "dual-eligible" patients nor the physicians treating them have it easy. 

Most patients Dr. Holcomb sees have multiple chronic illnesses, such as respiratory or heart conditions, and mental or physical disabilities, which means higher costs than for other Medicare or Medicaid patients. Because the two health care programs often don't communicate, Dr. Holcomb sees dual eligibles in different venues for different problems. Medicare might cover a patient's office or hospital visit, but Dr. Holcomb must turn to Medicaid for the night-time ventilators or other medical equipment his patients typically need for long-term care at home or in a nursing facility. 

"This is a very vulnerable population. They have a lot of health care needs. And it's a very expensive population. Yet care is very fragmented. Sometimes there are duplicate services, and it's a real waste," said Dr. Holcomb, chair of the Texas Medical Association Select Committee on Medicaid, CHIP, and the Uninsured.

The federal government and states are partnering to find a fix to the costly problem. In early 2015, Texas will test a new way to integrate care for dual eligibles by allowing some of the state's Medicaid managed care plans to take over patients' Medicare services and coordinate care across both programs. 

The model is the first of its kind with little track record. Texas is among roughly 20 states to take advantage of the new initiative created by the Affordable Care Act. At press time, the Texas Health and Human Services Commission (HHSC) was putting the finishing touches on a plan that could mean fewer walls, more information sharing, and a one-stop shop for physicians, patients, and health plans to manage and pay for dual eligibles' care. 

That is, if implementation goes smoothly, says Dr. Holcomb. TMA supports the pilot's goals to improve care and lower costs. But physicians want to ensure patient protection in the process, and fresh bruises from the state's 2012 expansion of Medicaid managed care leave them cautiously optimistic, Dr. Holcomb says. (See "Roadblocks to Medicaid Managed Care," October 2013 Texas Medicine, pages 14-21.)

"I'm all for saving money in a program that's very fragmented. It's crazy to have to go to Medicaid for some things and Medicare for others. And from the patient side, it would be simpler if it works out the way it shows on paper," he said. "But the devil is always in the details, and we just don't have much faith that managed care companies are really going to do what needs to be done to coordinate care for these patients." 

More than just money is at stake, adds Sheila Magoon, MD, executive director of the South Texas Physician Alliance, an independent practice association. The proposed enrollment mechanisms, for example, could shift patients into new Medicare plans and disrupt their longstanding relationships with the physicians who have treated their complicated conditions.

"We understand the need for being able to control costs and better coordinate care. But forcing patients into changes may not necessarily be in their best interest. They have developed trusting relationships with their providers, and that should not change," she said.

HHSC officials say the state has made improvements since the last Medicaid managed care rollout and has created additional safeguards in the dual-eligible pilot, such as continuity-of-care provisions. The pilot will run in six counties before going statewide. 

Medicaid/CHIP Project Management Director Tania Colon says the state's move to Medicaid managed care helped pave the way for this next step, "and we believe this model will prove beneficial in reducing confusion across the two programs and streamlining administrative processes for providers. It will also make navigating the system easier for clients and ensure the right level of support is available to ensure access to services." 

Streamlining Care

Over the past two legislative sessions, Texas lawmakers completed the statewide shift of most Medicaid enrollees from traditional fee-for-service Medicaid into privately run managed care plans. The latest expansions incorporated hospital, pharmacy, nursing home, and other long-term care services for Medicaid STAR+PLUS plans, which cover the elderly and people with physical disabilities, many of whom are dually eligible for Medicare and Medicaid. Texas' dual-eligible population stands at roughly 350,000.

Nothing about the new demonstration project changes the current Medicaid managed care structure or what Medicaid and Medicare each cover. However, the state experiment will allow five existing STAR+PLUS plans to take over dual eligibles' Medicare services through their corresponding Medicare Advantage plans. Ms. Colon says the Medicaid plans had to have previous experience with Medicare managed care. 

The pilot includes a total of 130,000 patients in Bexar, Dallas, El Paso, Harris, Hidalgo, and Tarrant counties. (See "Dual Demonstration.") Texas and the Centers for Medicare & Medicaid Services (CMS) each will pay the managed care plans a set fee for their respective Medicaid and Medicare services, in hopes the plans can contain costs for a population, which according to 2013 Medicare Payment Advisory Commission (MedPAC) figures, accounts for a disproportionate share of Medicare and Medicaid spending. (See "An Expensive Proposition.")

Physicians will get payment from and coordinate patients' care through a single entity with the help of a "care coordinator." Ms. Colon says STAR+PLUS plans already assign patients a similar contact to track their Medicaid services. For dual eligibles, the coordinator will organize both the acute care that typically falls under Medicare, such as hospital care, and long-term care services such as nursing home needs or disease management programs that fall under Medicaid. The project also hinges on assigning patients a single "medical home" or primary care physician through whom the care coordinator can arrange patients' care. 

The state-federal partnership also allows HHSC to access previously hard-to-reach Medicare data through the health plans, Ms. Colon says. That in turn will help the state and physicians see what's happening across the spectrum of care and help avoid conflicts or duplications of services, like hospital readmissions. Medicare managed care, she adds, provides additional benefits, such as hearing or weight management services, typically not included in Medicare fee-for-service or Medicaid state plans.

HHSC has yet to finalize its financial projections with CMS, but based on other state models, the agency expects savings of 2 percent to 4 percent over the three-year demonstration. According to CMS, however, some states have dropped out of the project over concerns they could not achieve such upfront savings, among other reasons.

Patient Choice at Stake 

Physicians worry the enrollment process the state plans to use puts patient choice at stake and say the state's poor track record with recent expansion of Medicaid managed care could pose other unintended patient care threats. 

Unless patients proactively opt out of the demonstration project or choose their preferred Medicare Advantage plan, the state will automatically enroll them into one that matches their current STAR+PLUS Medicaid plan. 

In a 2012 letter, TMA told HHSC that despite the association's "strong support" of efforts to integrate dual-eligible services, the so-called passive enrollment process eviscerates "patients' right to choose their own physicians as well as the health care delivery system that works best for their particular health care needs." Instead, TMA advocates that HHSC conduct a robust outreach campaign to educate dual eligibles about the potential benefits of obtaining Medicare and Medicaid services via a single health plan.

In fact, under federal rules, "any Medicare beneficiary has a fundamental right to choose their delivery system," whether to remain in traditional Medicare or opt into managed care, says Trey Berndt. He is associate state director for advocacy at the Texas chapter of AARP, an advocacy group for retired people, which shares TMA's concerns. 

"There are reasonable public policy goals to having better coordination of services, and for some patients managed care is a good deal. But we want to be sure that fundamental right is well communicated and maintained. The bottom line is, this is a big change for this population," Mr. Berndt said. 

MedPAC echoed those concerns: "Some dual-eligible beneficiaries and their caregivers are actively engaged in managing their care. These beneficiaries may have already established their network of providers within FFS [fee-for-service Medicare] and may choose to opt out of the demonstrations. Other beneficiaries may not have regular access to care in FFS. These individuals should be made aware of their choices and that passive enrollment into a health plan that increases access to care and coordinates care would be to their benefit."

Dr. Magoon adds many dual-eligible patients already struggle to understand how Medicare and Medicaid work together, and passive enrollment will only add more confusion. 

According to state figures, only 20 percent of Texas' dual eligibles are enrolled in a Medicare managed care, or Medicare Advantage, plan, which according to TMA's letter "indicat[es] a clear preference [among patients] for [Medicare] fee-for-service." Only one-third of those participate in the same Medicaid/Medicare plan.

Mr. Berndt, a former HHSC policy advisor, says Texas already experienced similar difficulties transitioning dual eligibles to a more complicated Medicare Part D drug program in 2006. (See "D Is for Drugs," June 2005 Texas Medicine, pages 26-31.) That shift involved only one benefit versus the spectrum of care under the dual-eligible demonstration.

In Massachusetts, which launched its pilot in January, about half of enrollees have selected their own plans, early numbers show. Of those automatically enrolled, 61 percent stayed with their assigned plan, 2 percent switched to a different one, and 25 percent opted out.

For physicians like Dr. Holcomb, who does not participate in Medicaid managed care, the passive enrollment process almost certainly means the dual-eligible patients he's been seeing for years likely will get reassigned to a Medicare plan he does not accept.

La Joya family physician Javier A. Saenz, MD, experienced that firsthand during the 2012 rollout of Medicaid managed care in the Rio Grande Valley. Despite his participation in several Medicaid networks, the state erroneously reassigned his long-standing patients to different doctors. 

"All of a sudden I'm out of network, and my patients were assigned to doctors in Harlingen and Weslaco when I had been their doctor for 15 years. And being out of network means being paid out-of-network fees, which is sometimes nothing," Dr. Saenz said.

He also worries that the state's plan could undermine his Medicare shared-savings accountable care organization (ACO), Rio Grande Valley Health Alliance, which has similar goals of improving care and reducing costs through a single medical home, care coordinators, and preventive services. Dual eligibles must remain in fee-for-service Medicare to stay with an ACO. If the state moves them to managed care, he says, "it would kill our ACO," which, along with another one in the area, has more than 11,000 Medicare patients, many of whom are dual eligibles. 

Physicians also question whether the Medicaid/Medicare managed care plans will have adequate physician networks and medical home infrastructure to achieve the pilot's quality improvement and cost-containment goals, particularly in light of the state's recent dual-eligible payment cuts. (See "TMA: Restore the Dual-Eligible Payment Cuts.")

Nothing about the demonstration reverses those cuts, which almost drove Dr. Saenz out of business. Other physicians weren't so lucky. TMA officials also expressed concern over Medicare Advantage plans' recent decisions to terminate physicians from their networks to meet the ACA's cost-cutting demands. (See "A Bitter Pill," March 2014 Texas Medicine, pages 39-44.) 

Dr. Holcomb adds that despite the state's plan to rely on medical homes, many dual-eligible patients rely heavily on specialists. 

"Primary care physicians would have to send them my way anyway. And we already know [some health plans] do not have adequate networks [of specialists] in Uvalde where our rural clinics are. So network adequacy is going to be a very critical issue for this unique population," he said.

And he has yet to receive a call from a care coordinator among the existing Medicaid managed care plans. "My patients don't even know they have a care manager, and nobody's ever called me," Dr. Holcomb said.

Mr. Berndt says even before the demonstration project, Medicaid plans were expected to assign care coordinators to organize all patients' services. For dual eligibles, that would include Medicare. 

"When we dug into the reality, we found that service fell far short of what was envisioned," he said, adding that plan models also vary. 

Texas AARP found that according to the state's own surveys, only 20 percent of 400,000 Medicaid managed care enrollees reported having a service coordinator; 40 percent of those who did not have a coordinator said they'd welcome the help.

Mr. Berndt says state standards have since improved. For example, plans must name a coordinator for certain high-risk patients — but the 20-percent figure holds steady. "The issue becomes even more important that services are coordinated for [dual eligibles] with a lot of chronic conditions or needs."

State Safeguards

Ms. Colon says HHSC is working closely with CMS to identify physicians already caring for dual eligibles and plans to give federal officials a comprehensive list of Texas Medicaid doctors serving this population. The same list will go to state Medicare/Medicaid plans, which HHSC says must invite each of those health professionals to participate in their networks. 

TMA officials clarify that under Medicaid rules, plans must give "significant traditional providers" — in this case, primary care and long-term care health professionals serving a majority of dual eligibles — the opportunity to participate for at least three years. But physicians must meet the plan's credentialing requirements and be willing to accept the contracted payment rates and terms.

"We want those providers to be included in the managed care plan to be able to provide those services, and we are working with health plans on that," she said. 

The state also will notify patients 60 and 30 days before enrollment in the demonstration. But Ms. Colon reiterated patients can opt out or switch plans at any point during the demonstration. 

"Where there have been previous authorizations of services, whether by Medicare or Medicaid, we often transfer those things in as part of the enrollment process to make sure there is no break in treatment. All of those pieces are going to be worked out in detail in our [health plan] contract requirements to make sure we have continuity of care. That's very important to us," she said. Those contracts also likely will include some provisions for out-of-network care, "but what we would really try to do and have health plans work to do is get providers in the network to enroll and provide those services."

With the recent Medicaid managed care expansions, HHSC officials say they've also beefed up oversight of plans and contracts, including network adequacy and prompt payment provisions, and will conduct "readiness reviews" to make sure plans meet those standards before launching the pilot. CMS also will monitor network adequacy "so there will be a lot of eyes on this to make sure clients have access to the providers they need for treatment," Ms. Colon said. 

Neither UnitedHealthcare nor Molina, two of the participating health plans, were available to comment for this story. In written responses, both plans said they will draw on their years of experience serving Medicare and Medicaid populations in Texas and other states. 

"Our goal is to ensure any changes to the program are seamless and without disruption of care," United officials said. 

Molina shares that goal and will "make use of the many lessons learned in the implementation of other programs both in Texas and other states to make the rollout as smooth as possible. There is a focus on achieving savings, but the program is structured to accomplish savings through better care management and coordination."

Molina also acknowledges some of the challenges health plans likely will face reaching dual eligibles and engaging them in care management programs. The plan may rely on community health workers, for example, to visit patients in their homes, community centers, even cars, if they don't have a stable home address or phone number.

"We will work with CMS and HHSC to ensure that our patients and providers are aware of the changes. There are continuity-of-care provisions that are designed to prevent interruptions in on-going episodes of acute care. As always, our preference is for beneficiaries to exercise their right to choose a health plan and a physician," Molina said.

TMA officials add the onus is on state officials, too, to regularly communicate with and engage physicians and patients in the rollout of the dual-eligible pilot. TMA will participate in statewide HHSC stakeholder meetings on the project and continues to advocate for Medicaid program improvements through several other state advisory groups. 

Dr. Holcomb acknowledges the dual-eligible pilot involves significantly fewer patients than were affected by the statewide rollout of Medicaid managed care. But unless the state gets it right, the next phase, which would include even harder-to-reach dual eligibles in rural Texas, could prove even more difficult.

Amy Lynn Sorrel can be reached by telephone at (800) 880-1300, ext. 1392, or (512) 370-1392; by fax at (512) 370-1629; or by email.


Dual Demonstration

In early 2015, Texas will test new ways to integrate care for the state's dual-eligible population, which stands at roughly 350,000. The pilot will roll out in the following areas, where patients will enroll in a single Medicare/Medicaid managed care plan to take care of their needs. 

County Enrollment Participating Managed Care Plans

Bexar 21,352 Amerigroup, Molina, Superior
Dallas 21,142 Molina, Superior
El Paso 16,634 Amerigroup, Molina
Harris 38,402 Amerigroup, Molina, UnitedHealthcare
Hidalgo 23,556 HealthSpring (Cigna), Molina, Superior
Tarrant 11,522 Amerigroup, HealthSpring

Source: Texas Health and Human Services Commission

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An Expensive Proposition

Because patients who are dually eligible for Medicare and Medicaid tend to be poor, elderly, or have a disability, and often have chronic physical and mental health problems, they continue to make up a disproportionate share of Medicare and Medicaid spending. That's why states like Texas are experimenting with new ways to care for this population. 

According to a 2013 Medicare Payment Advisory Commission report, dual eligibles:   

  • Totaled 19 percent of the Medicare population in 2009 but accounted for 34 percent of Medicare spending.
  • Comprised 14 percent of all Medicaid beneficiaries the same year but accounted for 34 percent of Medicaid spending. 

The Texas Health and Human Services Commission also reports that: 

  • The federal government spent $29.5 billion for Medicare services in Texas in 2007; $11 billion (37 percent) was for dual-eligible care. Texas spent $4.2 billion. 
  • The largest share of federal spending was for hospital services (33 percent), while the largest share of state spending (60 percent) was for institutional long-term care.


TMA: Restore the Dual-Eligible Payment Cuts

Fully restoring the cuts the 2011 Texas Legislature made to dual-eligible payments in a budget-saving maneuver remains a TMA priority. 

Last year, the Texas Health and Human Services Commission (HHSC) partially reinstated some of the money to care for these patients eligible for both Medicare and Medicaid. But the remaining payment reductions continue to squeeze physicians who care for this population, forcing a growing number of them to lay off staff, curtail services, or take out personal loans rather than stop seeing these patients.

In 2011, the legislature ordered a two-part reduction that eliminated Medicaid's full payment of patients' annual Medicare Part B deductible — $147 in 2014 — and stopped payment of dual-eligibles' coinsurance if the Medicare Part B payment for a service exceeds the Medicaid allowable, which is almost always the case for physician services. Together, the new policy resulted in more than a 20-percent payment reduction for physicians who care for these patients. 

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Last Updated On

May 13, 2016

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